What you’re witnessing in the video is intentional tool use. The octopus will go on to use the coconut halves to conceal itself from potential predators or prey. The outer covering is no different than humans donning a armor or a bee suit for future use. The fact that the octopus can think ahead in such a manner shows its ability to use advanced planning, putting its intelligence up a few more notches from what scientists previously understood.
The scientist who filmed the scene above claims he was laughing so hard he almost drowned. Fortunately, he did keep his composure and was also able to share this important footage with the world.